Correlation Between Easy Software and POLAR POWER
Can any of the company-specific risk be diversified away by investing in both Easy Software and POLAR POWER at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Easy Software and POLAR POWER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and POLAR POWER INC, you can compare the effects of market volatilities on Easy Software and POLAR POWER and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Easy Software with a short position of POLAR POWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and POLAR POWER.
Diversification Opportunities for Easy Software and POLAR POWER
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Easy and POLAR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG and POLAR POWER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLAR POWER INC and Easy Software is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Easy Software AG are associated (or correlated) with POLAR POWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POLAR POWER INC has no effect on the direction of Easy Software i.e., Easy Software and POLAR POWER go up and down completely randomly.
Pair Corralation between Easy Software and POLAR POWER
Assuming the 90 days trading horizon Easy Software is expected to generate 3.63 times less return on investment than POLAR POWER. But when comparing it to its historical volatility, Easy Software AG is 3.07 times less risky than POLAR POWER. It trades about 0.04 of its potential returns per unit of risk. POLAR POWER INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 241.00 in POLAR POWER INC on October 27, 2024 and sell it today you would earn a total of 47.00 from holding POLAR POWER INC or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Easy Software AG vs. POLAR POWER INC
Performance |
| Timeline |
| Easy Software AG |
| POLAR POWER INC |
Easy Software and POLAR POWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and POLAR POWER
The main advantage of trading using opposite Easy Software and POLAR POWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software position performs unexpectedly, POLAR POWER can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in POLAR POWER will offset losses from the drop in POLAR POWER's long position.| Easy Software vs. RETAIL FOOD GROUP | Easy Software vs. JIAHUA STORES | Easy Software vs. BURLINGTON STORES | Easy Software vs. TITANIUM TRANSPORTGROUP |
| POLAR POWER vs. Delta Electronics Public | POLAR POWER vs. Plug Power | POLAR POWER vs. Varta AG | POLAR POWER vs. Bloom Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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